Bank rolls out online service for SMEs; security concerns stall corporate push.
Amidst the scurrying for position in the electronic supply chain and online markets targeting the big end of town, Westpac has launched an online banking service for its neglected small to medium business customers. But it has expressed security concerns before it offers similar services to corporates.
Small business is the worst serviced group of customers, according to Paul Lilley, Westpac's chief executive for National Small Business. While discussing elements of its e-commerce strategy, Lilley said the bank wants to deepen its relationship with these customers.
"We're trying to provide as many cost-effective access points as possible," he said.
The Internet banking service is the hub of Westpac's online services for business strategy rolled out in the last couple of months. Since May the bank has implemented Impex, an import/export banking service, eMarket, a shopping directory and Online Super for electronic payment of superannuation contributions by small businesses, not to mention an online broking facility.
When complete, the SME online "suite" will offer a range of additional products and services, according to Harry Wendt, head of Westpac's eStrategy. These include Online Origination, to simplify credit applications and Net Direct, a browser-based Internet payment system for collecting payments. But the main service will be an e-procurement portal. The Westpac-branded e-marketplace is being developed by Intelisys Australasia, the bank's joint venture with US e-business developer, Intelisys Electronic Commerce. It is expected to be up and running by the end of the year.
Phase one, the Internet banking service, is very similar to Westpac's existing consumer Internet banking service. Wendt said the site is being developed from the ground up, specifically for small business customers.
"Rather than tweak the consumer site, we started with a blank sheet," he said. But "we could scale quite a lot across services," and leverage a lot of the existing infrastructure, he said.
Common features to the two sites include being able to check account balances, viewing transactions over the last 100 days or see statements from the last 12 months. New features for business customers include being able to link multiple accounts together in a single view, and assigning multiple users with different access levels to accounts. The service also includes GST payments.
The biggest gain for customers is the ability to make payments between accounts within Westpac or any other financial institution in Australia with a daily transaction limit of AU$5,000. Westpac said this limit would rise to AU$25,000 by the end of the year.
According to Wendt, the Internet is ideal for the large distribution and reach required for consumer and business banking, but he believes repudiation technologies-proving the authenticity of the transaction-are the barrier for corporate online banking.
"With corporates you're talking about much more serious amounts of money.
When you're sending AU$10 million, who initiated the transaction and where, is vital," he said. "Security would have to be PKI, but issues exist around the cost and supportability of it." Wendt said. Westpac is predicting the take up of its online business banking will be phenomenal. Lilley points to the success of personal Internet banking.
Westpac has 320,000 customers growing at a rate of 30,000 per month.
